The Federal Communications Commission's chairman is said to be planning a vote next month on limits to how many TV stations a company can own, rules he has said are too restrictive. The step stands to factor into Sinclair Broadcast Group Inc.'s planned purchase of Tribune Media Co.
FCC Chairman Ajit Pai is poised to schedule a July 12 vote on altering rules that cap broadcasters' reach at 39 percent of the national audience, according to two people briefed on the plan, who spoke on condition of anonymity because the proposal hasn't been made public.
A vote next month could head off a decision by the U.S. Court of Appeals for the D.C. Circuit in Washington that is considering a challenge to part of the existing rules. The case threatens to push Sinclair over the existing national ownership cap if it buys Tribune.
Pai hasn't publicly recommended a new limit and details of his proposal could not be learned.
Sinclair told the FCC its proposal to buy Tribune's 42 stations and sell others would leave it reaching almost 59 percent of the national audience. That share shrinks to less than 38 percent when counting just half the audience for some stations, as the FCC now allows, using a counting methodology that is under court challenge, Sinclair said in a filing.
Sinclair owns Little Rock's KATV, an ABC affiliate.
The acquisition would leave Sinclair with more than 200 stations and give the Maryland-based broadcaster known for its conservative views a national presence, with stations in major cities such as New York and Los Angeles.
If the FCC abandons the special counting technique that discounts the audience of former UHF stations and chooses a new limit under 59 percent, Sinclair could be forced to sell more stations than it currently proposes, Gigi Sohn, a former Democratic FCC official and critic of the deal, said in an interview.
Any limit above 39 percent would itself draw a court challenge, Sohn said. "That's going to be appealed right away," she said.
The audience-counting rule in question was eliminated by a Democratic FCC chairman in 2016. It was a relic of days when UHF stations -- broadcasting on channels 14 and higher -- used signals that didn't reach as far as stations assigned lower-numbered channels. That disadvantage has disappeared as broadcast technology changes.
Pai reinstated the discount in April of last year. Sinclair proposed its deal the following month.
Whether the FCC may let companies count just half the audience is under challenge before the Court of Appeals, where judges who questioned the technique during an April hearing are expected to issue a decision during July or August. A decision disallowing the technique would leave a combined Sinclair-Tribune above the limit.
Sinclair Chief Executive Officer Chris Ripley told investors May 9 that he expects the court will affirm the counting rule. If not, Ripley said the decision could be appealed. He also discussed the FCC's consideration of changes to the national ownership limit.
Business on 06/14/2018